Mid Qualified Rate

Mid-Qualified Rate

A mid-qualified rate is a tier of classification used by credit card payment processors to categorize transactions under a tiered pricing structure. 

Tiered pricing is one of several types of pricing structures available in credit card payment processing. 

Under tiered pricing, each transaction is classified by the payment processors into different levels or tiers that each has its own rate. 

Typically, there are three tiers or rate levels:

• Qualified
• Mid-Qualified
• Non-Qualified 

What Types of Transactions Fall into Each Tier? 

Payment processors control what factors are used to classify the transactions and set the level classifications. There are some generalizations between the processing companies that can be assumed.

Qualified Rate 

Transactions classified as qualified will have the lowest rates. These are the lowest possible rates a business will pay and may be used in advertising, however, it is important to keep in mind that not all transactions will fall into this category. 

Qualified transactions are typically made up of consumer non-rewards credit cards and debit cards. These are also usually transactions where the card is physically present. 

Mid-Qualified Rate 

A mid-qualified rate is a step down from qualified and thus is an increase in rate. It is still a better rate than non-qualified.

Examples of transactions that might fall into this tier are swiped rewards cards and manually entered (keyed-in) cards. 

In the case of e-commerce, mid-qualified rates may make up the bulk of the transactions since the card is not present. 

Non-Qualified Rate 

This is the lowest level of classification with the least competitive rate. Examples of payment that would be categorized as non-qualified are those made business credit cards and high rewards cards. 

Transactions in which the customer billing information is not subjected to a verification process may also be put into this tier since there is a higher risk of fraud. 

Final Thoughts 

A credit card processor can change the system used to classify transactions and determine rates without notice. A business considering using a payment processor using a tiered pricing model should be aware of which tier their transactions are likely to be classified as.